What In The World Is Facebook Doing?

| March 26, 2014 | 0 Comments

oculusFacebook (FB) is on a buying spree!  After making waves with its $19 billion purchase of messaging company WhatsApp, the social media giant is once again making headlines with a new acquisition.

But if you thought the WhatsApp purchase made little sense, then this week’s transaction will be a real head scratcher.

FB is spending $2 billion for a company called Oculus VR, maker of a device called Rift.  Unless you’re really into video games, you’re probably not familiar with the Oculus Rift.  It’s a virtual-reality headset that kind of looks like ski goggles.

Up until now, Oculus had been focusing on Rift for playing games in a virtual reality setting.  However, as part of FB, the potential uses for Oculus’ technology are off the charts.

Here’s the thing…

FB’s acquisitions are all about the future.  The company thrives off innovation – and when it comes to innovating, you can’t be shy.

That’s why I didn’t have a problem with the WhatsApp purchase despite the lofty price tag.  With WhatsApp, FB could potentially replace traditional telecom companies.

But if the WhatsApp purchase was inspired, then the Oculus purchase is a stroke of genius.  You see, with Oculus, the sky’s the limit for what Facebook can achieve.

Virtual-reality is the next frontier in technology.  Imagine being able to watch sporting events, sit in class, or scale a mountain, all from the comfort of your home.  That’s what’s capable with Oculus.

FB is going to use Rift for more than just gaming. It could offer a limitless amount of virtual-reality content as it becomes more widely available.  There’s so much potential because the technology is still so new.  And don’t forget, more than anything else, FB is a content provider.

It will be intriguing to see what Zuckerberg and FB do with Oculus from the start.  But most importantly, I think $2 billion is a small price to pay for groundbreaking innovation.

Facebook is one of those companies I consider an excellent choice as a long-term investment.  Basically, you can ignore the short-term volatility in the stock, because the future is as bright as ever.  In fact, snatching up some long-term call options wouldn’t be a bad idea at these levels.

Yours in Profit,

Gordon Lewis

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Category: Breaking News

About the Author ()

Gordon Lewis is the Chief Investment Strategist and editor for the popular daily newsletter – Options Trading Research. He’s also editor of our dynamic theme-based options trading service, Advanced Options Adviser, and one of the key analysts behind the highly successful Options Trading Wire.